Google Testing Skippable Pre-Roll Ads For YouTube

In the neverending quest to monetize YouTube, Google is now apparently trying skippable pre-roll ads.

Why skippable?

Probably because of the same logic that causes people to keep pressing elevator buttons dozens of times even though it doesn't make the elevator come any faster: The sensation of control.

Most Internet users will likely be too lazy to skip pre-roll ads (provided they're short). But having the ability to do so will likely stop them from screaming from rooftops about how evil Google is.

Here's a quick take from JP Morgan's Imran Khan:

According to MediaPost, Google will begin testing skippable pre-roll ads in YouTube videos today. As this test only affects a small sampling of opt-in content partners, we do not think it will have an immediate monetary impact. However, we think that this is another step in Google’s quest to discover the best monetization model for the site. Following are our key thoughts:

We think the test will provide useful user behavior data to Google. This new ad format trial will provide Google insights into the type of person who may skip an ad, what type of ad they might skip, and what pieces of content outperform others. MediaPost also reports that Google will look at whether some ads are skipped in a specific portion of the sessions.

Results could be useful in launching a cost per action advertising model. In this model, advertisers would only pay for opt-in engaged views of the ads, as is done now with promoted videos. Google’s YouTube product manager eventually sees a model where the advertiser only pays for a completed view of the ad. Further quality and user signals would determine the correct place in the video to serve up the ad.

In our opinion, such data could lead to an ad format similar to that currently used in search. If Google collects valuable user data, this could contribute to the development of a quality-score system similar to the one used to determine the placement and pricing of search ads. If the model is similar to search, Google could use data on whether it thinks the ads are likely to be skipped or elected to be viewed to establish a differentiated pricing model for placement, thereby enhancing both the user and advertiser experience.